Inter-American Development Bank
facebook
twitter
youtube
linkedin
instagram
Abierto al públicoBeyond BordersCaribbean Development TrendsCiudades SosteniblesEnergía para el FuturoEnfoque EducaciónFactor TrabajoGente SaludableGestión fiscalGobernarteIdeas MatterIdeas que CuentanIdeaçãoImpactoIndustrias CreativasLa Maleta AbiertaMoviliblogMás Allá de las FronterasNegocios SosteniblesPrimeros PasosPuntos sobre la iSeguridad CiudadanaSostenibilidadVolvamos a la fuente¿Y si hablamos de igualdad?Home
Citizen Security and Justice Creative Industries Development Effectiveness Early Childhood Development Education Energy Envirnment. Climate Change and Safeguards Fiscal policy and management Gender and Diversity Health Labor and pensions Open Knowledge Public management Science, Technology and Innovation  Trade and Regional Integration Urban Development and Housing Water and Sanitation
  • Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Caribbean Development Trends

  • HOME
  • CATEGORIES
    • Agribusiness
    • Antigua and Barbuda
    • Barbados
    • BehaviorChange
    • Belize
    • Bermuda
    • biodiversity
    • Blockchain
    • Caribbean
    • Caribbean Culture and Media
    • Climate Change
    • Creative Economy
    • Crime Prevention and Citizen Security
    • Data and Knowledge
    • De-risking
    • Dominica
    • Dutch
    • Early Childhood Development
    • Economic Growth
    • Education Policy
    • energy
    • entrepreneurship
    • Environmental and Climate Change
    • Events
    • Extractives
    • Finance
    • Fiscal Rules
    • gender
    • Governance and Regulatory Policy Reforms
    • Grenada
    • Guyana
    • Haiti
    • Health
    • Health Policy
    • Hurricane
    • Hurricane Irma
    • infrastructure
    • Innovation and change
    • Intellectual Property
    • IWD
    • Jamaica
    • JumpCaribbean
    • Labor
    • Labour Markets
    • MOOC
    • Music
    • Natural Disasters
    • Nurturing Institutions
    • OECS
    • Podcast
    • Poverty
    • Private Sector and Entrepreneurship
    • Saint Kitts and Nevis
    • Saint Lucia
    • Saint Vincent and Grenadines
    • skills
    • Sports for Development
    • Suriname
    • Technology
    • The Bahamas
    • The Blue Economy
    • Transportation
    • Tourism
    • Trinidad and Tobago
    • Uncategorized
    • VAWG
    • Webinar
    • women
    • Women for Change
    • youth
  • Country Offices
    • Bahamas
    • Barbados
    • Guyana
    • Jamaica
    • Suriname
    • Trinidad and Tobago
  • Press Releases
    • Bahamas
    • Barbados
    • Guyana
    • Jamaica
    • Suriname
    • Trinidad and Tobago
  • Authors

How The Bahamas’ Fiscal Responsibility Framework of 2018 will aid governance and accountability

December 7, 2018 by Dr. Allan Wright Leave a Comment


The Bahamas’ Fiscal Responsibility Bill (FRB) 2018, can be compared with some standard principles that typically guide the formation of a Fiscal Responsibility Framework (FRF).  Based on our examination, we conclude that the objectives of The Bahamas’ proposed FRF are clear, sound and are in accord with the typical objectives of a standard rules-based framework.  We also find that the proposed FRF its embedded fiscal rules, are well designed and meet the key requirement because they will be enshrined in law with an independent oversight fiscal council to monitor and report on compliance and administrative sanctions in cases of breach.

Importantly, The Bahamas’ proposed FRF strikes a good balance between credibility and flexibility to support the deployment of counter-cyclical fiscal policies when needed.  Overall, the proposed FRF is a solid one, and if implemented as stipulated in the FRB 2018, it will help to entrench fiscal discipline, enhance the budget transparency and credibility and improve fiscal accountability and overall fiscal governance.

Lessons from the implementation of the Fiscal Responsibility Legislations (FRLs) in Jamaica and Grenada suggest that The Bahamas’ FRF should be accompanied by or embedded in comprehensive Public Financial Management (PFM) legislation.  The Jamaica and Grenada experiences demonstrate that strong PFM systems are integral for the smooth implementation of FRLs.

Another lesson is that public consultations are not only important prior to the design of a FRL, but they also important during its implementation.  Therefore, it would be prudent for the Government of The Bahamas to hold orientation sessions for all key stakeholders to promote and entrench a new culture of fiscal responsibility, transparency and accountability.

Finally, given the inherent vulnerability of The Bahamas to natural hazards, it would be important to embed contingency provisions for natural disasters in the FRL.  Indeed, explicit governance arrangements for a contingency fund for post natural disaster rehabilitation would be a welcome addition to The Bahamas’ FRB 2018 and support fiscal resilience, as well as resilience to environmental shocks. Read more here.

[1]  Total expenditure less interest payments. [2] On May 10th, 2018, the Minister of Finance announced that the Cabinet had approved the establishment of an independent fiscal council as part of measures to strengthen Jamaica’s FRF; however, at the time of writing this blog the council was not yet established.

 

 

Dr. Allan Wright is currently an Economics Sr. Specialist at the Inter-American Development Bank, based in Nassau, Bahamas and an associate researcher for the Caribbean Centre for Money and Finance.

Formally a senior Economist at the Central Bank of Barbados and a Researcher at the Center for Monetary Studies in Latin America (CEMLA), Dr. Wright received his PhD in Economics.

Dr. Wright’s publications on growth, investment and tourism have appeared in regional and international journals. His current work lies mainly in the areas of debt and fiscal policy, forecasting, de-risking, economic growth, foreign direct investment and aspects of the real sector including tourism.

 


Filed Under: Economy & Investment

Dr. Allan Wright

Dr. Allan Wright is currently an Economics Sr. Specialist at the Inter-American Development Bank, based in Nassau, Bahamas and an associate researcher for the Caribbean Centre for Money and Finance. Formally a senior Economist at the Central Bank of Barbados and a Researcher at the Center for Monetary Studies in Latin America (CEMLA), Dr. Wright received his PhD in Economics. Dr. Wright’s publications on growth, investment and tourism have appeared in regional and international journals. His current work lies mainly in the areas of debt and fiscal policy, forecasting, de-risking, economic growth, foreign direct investment and aspects of the real sector including tourism.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Follow Us

Subscribe

Search

Caribbean Dev Trends

We provide unique and timely insights on the Caribbean and its political, social, and economic development. At the IDB, we strive to improve lives in the Caribbean by creating vibrant and resilient economies where people are safe, productive and happy.

Similar posts

  • Are Governments Wasting Your Tax Money?
  • Fiscal Councils: Cutting edge fiscal architecture, or panacea?
  • The Jamaica Chapter of the Caribbean Growth Forum Holds First Accountability Workshop – Progress on the Rise!
  • How to Strengthen Transparency in Extractive Sector Governance? Ask Trinidad and Tobago
  • Three key lessons on institutions in Barbados from IDB’s “Nurturing Institutions for a Resilient Caribbean”

Footer

Banco Interamericano de Desarrollo
facebook
twitter
youtube
youtube
youtube

    Blog posts written by Bank employees:

    Copyright © Inter-American Development Bank ("IDB"). This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives. (CC-IGO 3.0 BY-NC-ND) license and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC- IGO license. Note that link provided above includes additional terms and conditions of the license.


    For blogs written by external parties:

    For questions concerning copyright for authors that are not IADB employees please complete the contact form for this blog.

    The opinions expressed in this blog are those of the authors and do not necessarily reflect the views of the IDB, its Board of Directors, or the countries they represent.

    Attribution: in addition to giving attribution to the respective author and copyright owner, as appropriate, we would appreciate if you could include a link that remits back the IDB Blogs website.



    Privacy Policy

    Copyright © 2025 · Magazine Pro on Genesis Framework · WordPress · Log in

    Banco Interamericano de Desarrollo

    Aviso Legal

    Las opiniones expresadas en estos blogs son las de los autores y no necesariamente reflejan las opiniones del Banco Interamericano de Desarrollo, sus directivas, la Asamblea de Gobernadores o sus países miembros.

    facebook
    twitter
    youtube